Chairman of the Joint Chiefs of Staff and Former Treasury Secretary Speak at SOM

Two very different leaders spoke to SOM audiences the last week of November — one, a career military officer at the pinnacle of his career; the other, a famed executive who served in the Bush administration and now devotes himself to overhauling healthcare. Admiral Michael Mullen, chairman of the U.S. Joint Chiefs of Staff, addressed Professor Paul Bracken’s class, “Strategy, Technology, and War,” lecturing on American foreign policy and threats to the homeland. Former Secretary of the Treasury Paul O’Neill spoke to the school’s MBA for Executives: Leadership in Healthcare program about how a radical restructuring of the nation’s hospitals can save the country billions of dollars and many lives.

Admiral Mullen: “I’d rather deter and prevent than be in a fight.”

Mullen, a native Californian who first saw combat in Vietnam, provided Bracken’s class with an overview of the challenges facing the United States. As he sees it, America is engaged in a long war against Islamic extremists, one that will be both asymmetric and unpredictable. The Middle East, he said, keeps him awake at night, particularly when religious terrorism is potentially mixed with weapons of mass destruction. Flying over New York for his visit to Yale, he said he was reminded how hard the country’s enemies can hit the homeland.

“It’s on my mind every single day,” he said. “I was in the Pentagon that day. The plane flew in right under my office…It upended the world.”

After assuming his current post this summer, Mullen traveled both to Iraq and Afghanistan to assess the reality on the ground. He said the government had underestimated the situation in Iraq at the beginning of the war and failed to supply the necessary resources to stabilize and rebuild the country. But now, he said, things are much better. “Security is better, the economy is starting to work and reconciliation is going on in the provinces,” he said. “The big step, though, is political reconciliation on the national level.” He still sees a need to increase the military’s capabilities in Afghanistan.

Mullen said he hopes to be able to close the Guantanamo Bay prison in the near future, calling it an issue that “needs to be resolved,” although he added that he’d “put it up against any other detention facility in the world.” But while his focus might be on the Middle East in the short-term, he expects the world to offer him many surprises. For one, he believes the United States pays too much attention to events to the east and west, often ignoring what’s going on to our north and south. He’s also recently spent time in China visiting the nation’s naval facilities, a trip he found encouraging for U.S.-China relations. After his visit, howeverChina refused on two occasion to let U.S. vessels into its ports, causing confusion and concern back in America.

Ultimately, Mullen said the future will bring up numerous issues and crises no one can foresee. While he’s a military man, Mullen said the key to dealing with situations such as Iraq or Afghanistan will be to constantly be reminded that these conflicts aren’t just about the military. “We can provide the security — but it’s not sufficient to get us where we want to go,” he said. “We need an economic piece and we need a political piece. We’re not exactly the most patient country in the world. When we make the decision to go to war, we like to get in and get out. But these interventions take seemingly decades and not a short amount of time.”

Paul O’Neill: “Healthcare is the least productive sector of the U.S. economy. That provides us with an opportunity.”

When he was the CEO and Chairman of Alcoa from 1987 to 1999, O’Neill stressed what he called “systematic excellence,” structuring the organization so that everyone in it could achieve their potential. At Alcoa, he aimed to reduce workplace injuries to zero, and over his tenure, lost workplace time fell roughly by half. Appointed to be President Bush’s first Treasury Secretary, he left after less than two years and became an administration critic. (He told the MBA-E class: “I went and left in the same condition; I was happy when I went and happy when I was fired.”) Since 2002, he’s focused on putting his organizational expertise toward healthcare reform, stressing that radical results can come without major government intervention. “If people in the healthcare industry are able to do everything everyday with excellence that they know how to do, it could have a huge impact on the American population,” he said. “And you could simultaneously decrease costs by $1 trillion per year.”

O’Neill explained how the head of Allegheny General Hospital in Pittsburgh attended the “Alcoa University,” a series of organizational classes at the aluminum giant, and used the lessons to reduce central line infections and deaths from 35 and 19, respectively, in 2002 to zero in 2004. To achieve this, people at all levels were retrained and all personnel in an area were given pagers so that if an infection developed, everyone converged on the scene to deal with it immediately. At a veterans hospital he studied, O’Neill found only 28 percent of nurses and 10 percent of doctors were practicing acceptable hand hygiene. He also found that supplies weren’t centralized or were faulty and people were often too busy to be diligent, especially doctors. “Until we cultured the white coats, people who wore them didn’t believe they could carry bacteria,” he said. “And these were very well-educated people.” By putting supplies in a central place and making sure they were always in stock, and by stressing hygiene, O’Neill said the situation improved. “Over time you begin to get behavioral changes,” he said. “People honor what they learn together.”

O’Neill believes that major improvements can come if a few “islands of excellence” could be established that show how great an impact “systematic excellence” can have. “That way people don’t have excuses anymore,” he said. “We can figure out how to create a revolution from the inside.”